Author Archive for: Alex - Chart Freak
Entries by Alex - Chart Freak
PUBLIC REPORT- THE TURNING POINTS
Markets rally, Markets drop, and markets reach turning points. We discussed this in the premium side of the weekend report. Lets look at a couple of the areas that we discussed Sunday March 20th.
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SPX – Whether the recent run of lower highs and lower lows started a bear market or not, I still expected a strong rally when we were at recent lows. It would draw in bulls, but what comes next after 6 weeks higher?
This rally has played out pretty much as expected, but I want to point out some interesting changes in character that could affect future trades / trading.
Open To Debate
The weekend report discussed Turning Points. Though I have laid out my big picture expectations, I also mentioned that at turning points it is important to continue to examine clues from an unbiased view point. Sometimes subtle changes at turning points can either alter the bigger picture or confirm it. I discussed a few changes developing in my weekend report, so lets continue to examine any clues that may appear.
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SPX - Our run higher still resembles the run higher last fall in many ways. I am expecting a dip down into a DCL soon, but the move out of that daily cycle low is going to be important to watch. It is not time to short this market yet. As the market rises , I see a bearish wedge and lighter volume. We wait for the dip.
Usually at tops (even temporary tops) , the VIX gets down near $12 -$13. Spikes higher in the vix can lead to bottoms, and a spike lower can signal a top. The vix is low enough, but a spike lower would probably signal a temporary top.
The Turning Point
It doesn't matter whether markets are rising or falling, sooner or later, they hit a turning point. We have a lot to discuss this weekend regarding those turning points, so lets dig right in...
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SPX - Whether we started a bear market or not, I still expected a strong rally when we were at recent lows. It would draw in bulls, but what comes next after 6 weeks higher?
This rally has played out pretty much as expected, but I want to point out some interesting changes in character that could affect future trades / trading.
Welcome To Quad Witching
Quad witching can add volume and a little volatility to the trading day, so I just wanted to do a review of the markets and discuss a few trades.
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Let me start with the IWM this time. I actually like this set up for a run to the 200msa. We'll see if Quad witching helps or hinders things. This does look bullish.
I wanted to start with the IWM, because...
When Is It A Lower Risk Trade?
In the premium section of chartfreak, we’ve discussed using Low risk entries to take a position in a stock, but what makes them low risk? Lets take a look at a couple of examples. . First, we have been trading sectors that looked to have bottomed recently after seriously selling off . They give evidence […]
Calculated Risks
Nobody wants to take unnecessary risks in the market, but the saying "Nothing ventured, nothing gained" applies too. So you have heard me mention looking for "Low risk entries", but what is that? It is timing an entry where the risk to the downside is minimal, and the gain on the upside outweighs it. We will discus that further later in this report.
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SPX -Friday is Quad witching. The Fed didn't kill the markets this time, but that wasn't a very convincing push either, was it?
No Real Change Here
It's Fed Wednesday, and so far there is no real change here, going into that decision.
SPX - No real change in this chart, but there may be a change of character. We have the Fed decision Wednesday and Quad witching Friday to pop this above the 200sma, or drop it down to maybe the 50sma area. Tuesdays selling recovered.
Let me point out this ...
Partly Clear And Partly Cloudy
The short term trade set ups seem pretty clear, but with that Fed Wednesday Meeting rapidly approaching, the end of the week could host a number of reactions. Lets see how things are currently unfolding .
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SPX - This bearish wedge was forming last week (March 9 chart).
The SPX did drop quickly and recovered last week, as seen here. Is this still a wedge though?
The Fed Mtg is approaching and could affect the outcome.
There It Is Again
Well, after several weeks of good trading , it appears again. Yes, I'm taking about that Elephant in the room - only this time things He's levitating as we head into the Fed Mtg this Wednesday. Lets take a look at our markets, keeping in mind that we do have a Fed Meeting this week.
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SPX - I see a rising wedge and on day 20, we could drop to a 1/2 cycle low. So we could drop heading into the Fed Wednesday or possibly see a drop after?
